LONDON, Feb 2 (Reuters) - Spanish and Italian shares led
European equity indexes lower on Monday as investors grew more
worried about the possible ramifications of Greece's debt
negotiations for the rest of the euro zone periphery.

In its first week in office, Greece's new government has
made clear it wants to end the existing arrangement with the
European Union, European Central Bank and International Monetary
Fund "troika" when its aid deadline expires on Feb. 28.

Investors had taken the view that the impact of a Greek
crisis could be contained. But the prospect of tough
negotiations between Greece and its lenders is starting to sour
appetite for assets in countries such as Spain and Italy, where
anti-austerity parties have also gained popularity.

Analysts at Goldman Sachs wrote on Monday they were
withdrawing their preference for Italy's FTSE MIB index
and Spain's Ibex, which were down 0.7 percent and 1.7
percent at 1509 GMT, over the STOXX Europe 600.

"We recommend closing tactical pro-cyclical exposures in
peripheral ... equities (overweight MIB and IBEX vs. SXXP) until
more clarity emerges about the direction ongoing negotiations
between the new Greek government and the European authorities
are taking," they said in a note.
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